NCC Urges Action on Disaster Provisions

National Cotton Council officials are urging the Bush administration to complete the approval of the regulations for the quality loss provisions of the 2001 disaster assistance program as quickly as possible.

John Maguire, the Council’s vice president for Washington operations, said USDA was able to update the regulations for the quantity loss provisions in fairly short order following passage Fiscal Year 2001 Agricultural Appropriations Act last fall. But the quality loss regulations have been a different matter.

“We were successful in getting them to begin sign-up (for quantity losses) on Jan. 18,” Maguire told farmers attending the Mid-South Farm and Gin Show. “The reason we pressed so hard on this was because we didn’t want a new administration to inherit the program and have to start all over again.

“We stressed FSA personnel to the limit. They haven’t had a Christmas break in a number of years now. We appreciate their work,” he said.

The NCC convinced the department to allow producers to combine their quality and quantity losses. One of the significant issues in the disaster bill was in separating quantity and quality. The NCC also wanted to make sure farmers could combine them as they had in the past.

“What’s slowed that down is they’re dealing with about 130 specialty crops that don’t have the classing and rating standards that cotton and some other commodities do,” he noted.

“The good news is the bill has no pro-ration so as people go in and sign up there won’t be a pro-ration factor applied to the benefits they’re eligible for. In my opinion, those who have signed up and gotten the paperwork done – subject to the payment limitation – should have the document act as a letter of credit. Hopefully, bankers will recognize it as such.”

Another thing the NCC did with quality loss has to do with the 20 percent threshold.

“We were able to put some language in legislation last year to clarify that a farmer’s quality loss applies to the affected production on the farm, not total production. That can be very significant in qualifying for assistance.”

There’s also an appropriations bill provision that gives USDA authority to make severe economic loss coverage available. With escalating fuel and energy costs, the council took a proposal to USDA last year.

“We suggested they could use the authority (from the provision) to make some compensation available. The last administration chose not to exercise that authority. But as conditions continue, we’re going to continue to work that.”

Funds from where?

The federal budget surplus projected over the next 10 years is $5.6 trillion. Social Security and Medicare – which are walled off – account for about $3 trillion of that, says Maguire. The president’s proposed tax cut takes about $1.6 trillion of what remains. That leaves a bit over $1 trillion left.

“Agriculture will be competing with defense, education and debt reduction not for $5.6 trillion, but for $1 trillion provided the economy stays strong. Our view is that this projection is as good as it’ll get and that’s why we’re putting so much energy into working with the budget committees. We can have great ideas, but if there aren’t funds available to write that policy, they can’t be enacted.”

So what’s agriculture’s message?

“Our message is that farmers are facing rapidly increasing input costs. Input costs went up $7.6 billion in 2000 and we expect them to go higher this year,” Maguire said. “Commodity prices are chronically low. They’re at 15-year lows and aren’t expected to recover significantly anytime soon.

“Farmers are also facing sluggish export demand. The Asian economic recovery has been slower than expected and the U.S. dollar is up 25 percent over 1996. The U.S. dollar is up 42 percent against competitors’ currency rates. That makes it tough to export bulk commodities and in cotton it makes textile and apparel imports attractive to the U.S. consumer.

“That all adds up to a cost-price squeeze and low farm income. That means we’re stressing that there’s a need for continued short-term assistance and also a need for more funding so we can write more effective long-term policy.”

Politics

Maguire says with such a slim Republican majority in the House, moderates have a lot of leverage in influencing the legislative process. That’s generally good for agriculture because the NCC works with moderates of both parties and when that group has leverage it usually means farm policy gets developed quicker.

Since Vice President Dick Cheney has the deciding vote, Republicans also technically control the Senate.

“Every Senate committee has equal representation between the parties. The Senate Agriculture Committee has 10 Republicans and 10 Democrats. Significantly, five members are from cotton states. There are 11 members from Midwestern grain states. Therefore, the committee has a strong grain/oilseed bias.”

Agriculture wasn’t a huge issue during the last elections. Right after the election, however, President Bush held a summit in Austin and invited farming commodity leaders.

“We thought it was very significant that the president chose to have such a meeting in Austin before he came to Washington. Another significant thing was he had the Secretary of Agriculture and the administrator of the EPA in the same room. We felt that sent a very important signal.”

Last year’s four

Last year, the National Cotton Council (NCC) worked on four key pieces of legislation, says Maguire.

The first was the crop insurance reform bill, which had emergency assistance added.

“Thanks in large part to House Agriculture Committee chairman Larry Combest and Mississippi’s Sen. Thad Cochran (who convinced Congress to add economic loss assistance to the bill) growers received much needed Market Loss Payments early last season. Sen. Cochran also made sure that $100 million in cotton seed assistance was made available for the 2000 crop,” says Maguire.

The NCC also worked on the agriculture appropriations bill, which is where the weather-related disaster assistance package was added. Thanks to the efforts of Kenneth Hood, Sen. Cochran and others, the appropriations bill contained a substantial increase in the boll weevil eradication funding – which went up from $16 million to $79 million, says Maguire.

“For the first time since I’ve been working on this, we now have a true one-third cost share for eradication.”

The NCC also worked on a revamp of the U.S. Warehouse Act.

“As we move into the electronic age, it’s very important the industry have legislation in place that allows easy access to electronic commerce,” says Maguire.

Lastly, the NCC worked on CBI parity.

“We spent three years working on this. We believe this will help our domestic textile industry and if it’s implemented correctly it could add about 1 million bales of off-take to the domestic market yearly.”